Comment by zozbot234
5 hours ago
> Productivity comes from labor AND assets though. You need the farmer and the tractor. Why would we create a tax system that encourages people to divorce themselves from having a stake in the means of production?
This is exactly why economic models broadly show that taxing capital assets makes workers worse off in the long run. An abundance of capital means that workers will be more productive on the margin, so their wage will be higher. This extends to the capital-income taxation involved in income taxes: pure labor taxes or consumption taxes are inherently more efficient. There are countervailing effects (taxing capital income works as an effective way of indirectly taxing the unearned value of resource-like assets, or of idiosyncratic skills that happen to correlate with holding more capital-like assets) but they can only roughly justify the current income tax arrangement, not some extra tax on assets.
Oh good! I was worried that trickle down economics was self-serving nonsense pushed by think tank economists on behalf of their benefactors. Since it is economic fact rather than self-serving fiction, when I review its track record I will find that it caused an upward inflection in real wages, right? Right?
https://wtfhappenedin1971.com/
Oops!
As long as capital doesn't get involved in some kind of highly financialized spiral getting further and further divorced from the real economy, we should be good.
That could never happen here. We have a history of strongly regulating capital and banks. Why look at all the executives we jailed for the 2008 financial crisis!
Total labor compensation has in fact grown. Unfortunately, much of the non-wage compensation involves services like healthcare that has become a lot more expensive over time due to burdensome overregulation and an overall lack of price transparency.
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>Since it is economic fact rather than self-serving fiction [...]
You deride the weak justification for trickle down economics, then proceed to link wtfhappenedin1971.com, a site that tries to argue for the reintroduction of the gold standard through a gish-gallop of random charts?
The gap between productivity and wages is striking, isn't it?
I'm not perfectly aligned with gold bug politics. Their faith in the Kindleberger world is misplaced and their tax aversion can make them useful to my opponents, but at the same time they tend to take the Cantillon Pump and Balance of Payments mechanisms seriously while my traditional allies do not.
No, I don't mind borrowing their charts. Why? Do you have a better go-to link for The Wedge?
3 replies →
What percentage of increased productivity has gone back to the workers as increased financial health during the last say 20 years? Not increased wages. Their increase in end of day actual financial health versus end of day increase in actual financial health of the owning class? Not some Peter/Paul highlighting Peter 'wages have gone up' while ignoring any stealing from Paul 'actual financial health' has gone down metric.
300 years of thinking has established that copyright is the best way to sustain ongoing creation of knowledge and thought, yet the same crowd seem pretty fine gutting that 300 years of understanding because of their judgement that their desired use case for today outweighs the cost to society of lost future knowledge creation, so they seem plenty happy to ignore established thought when it benefits them.
People at the bottom end of the income scale are sharply deterred from holding any meaningful amounts of savings, because this can exclude them from 'means tested' benefits. This is effectively a disguised ~100% "wealth tax" that hits many among the most heavily disadvantaged and marginalized. We're essentially telling people that they have to be living literally hand-to-mouth before they're deemed to deserve any kind of broader social support.